Mortgage and refinance rates today, Dec. 7, 2021

Today’s mortgage and refinance rates 

Average mortgage rates edged higher yesterday. But such a small increase is unlikely to bother you much. Don’t let tiny movements on Monday and last Friday fool you. There’s still plenty of volatility to come.

So far this morning, it’s looking as if mortgage rates today might edge modestly higher. But that could change as the day progresses.

Find your lowest rate. Start here (Dec 7th, 2021)

Current mortgage and refinance rates 

Should you lock a mortgage rate today?

Lock your mortgage rate today if you’re cautious over money matters. Or float if you like to gamble. Which course of action will prove profitable is way beyond my powers of prediction — and everyone else’s.

That’s because everything depends on how economically damaging the Omicron variant of COVID-19 turns out to be. And anyone who currently forecasts that is guessing.

I don’t yet have enough information to change my personal rate lock recommendations. But read them in the light of the above. For now, those remain:

• FLOAT if closing in 7 days
• FLOAT if closing in 15 days
• FLOAT if closing in 30 days
• FLOAT if closing in 45 days
• FLOAT if closing in 60 days

>Related: 7 Tips to get the best refinance rate

Market data affecting today’s mortgage rates 

Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data, compared with roughly the same time yesterday, were:

• The yield on 10-year Treasury notes rose to 1.45% from 1.38%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were higher soon after opening. (Bad for mortgage rates.) When investors are buying shares they’re often selling bonds, which pushes prices of those down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
• Oil prices climbed to $71.58 from $67.71 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity 
• Gold prices inched up to $1,782 from $1,778 an ounce. (Neutral for mortgage rates*.) In general, it is better for rates when gold rises, and worse when gold falls. Gold tends to rise when investors worry about the economy. And worried investors tend to push rates lower
• CNN Business Fear & Greed index — increased to 31 from 20 out of 100. (Bad for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So lower readings are better than higher ones

*A change of less than $20 on gold prices or 40 cents on oil ones is a fraction of 1%. So we only count meaningful differences as good or bad for mortgage rates.

Caveats about markets and rates

Before the pandemic and the Federal Reserve’s interventions in the mortgage market, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.

So use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to rise modestly. But be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.

Find your lowest rate. Start here (Dec 7th, 2021)

Important notes on today’s mortgage rates

Here are some things you need to know:

1. Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care
2. Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
3. Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the wider trend over time
4. When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
5. Refinance rates are typically close to those for purchases. And a recent regulatory change has narrowed a gap that previously existed

So a lot is going on here. And nobody can claim to know with certainty what’s going to happen to mortgage rates in coming hours, days, weeks or months.

Are mortgage and refinance rates rising or falling?

Today

The epic struggle I described yesterday continues. And is likely to do so until public health researchers are better able to assess the likely impact of the Omicron variant.

It’s looking probable that Omicron is much more transmissible than earlier variants. And researchers here and in Europe are predicting that it is “likely to become the dominant strain in the coming weeks and months.” That’s according to a team led by Harvard Medical School.

But we still don’t know whether it will bring more or less harmful health outcomes. Nor whether it will be more resistant to existing vaccines and previous infections. Many believe those vaccines will continue to provide good protection against serious illness and deaths.

Markets and mortgage rates

Markets (including the one that largely determines mortgage rates) hate uncertainty. And investors are currently having a stressful time as they await a clearer picture of the likely economic effects of Omicron.

Over the last couple of days, those investors seem to have been leaning toward an optimistic view of the Omicron effect. But they have only a fragile basis for that attitude. And it will last only so long as there are few negative headlines and reports.

So expect mortgage rates to be volatile and unpredictable. They’ll probably rise when Omicron stories are optimistic and fall when those stories suggest the pandemic might be really bad. And they’re unlikely to settle down until we have a much clearer picture.

For more background, read Saturday’s weekend edition of this daily report.

Recently

Over much of 2020, the overall trend for mortgage rates was clearly downward. And a new, weekly all-time low was set on 16 occasions last year, according to Freddie Mac.

The most recent weekly record low occurred on Jan. 7, when it stood at 2.65% for 30-year fixed-rate mortgages.

Since then, the picture has been mixed with extended periods of rises and falls. Unfortunately, since September, the rises have grown more pronounced, though not consistently so.

Freddie’s Dec. 2 report puts that weekly average for 30-year, fixed-rate mortgages at 3.11% (with 0.6 fees and points), slightly up from the previous week.

Expert mortgage rate forecasts

Looking further ahead, Fannie Mae, Freddie Mac and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.

And here are their current rate forecasts for the remaining, current quarter of 2021 (Q4/21) and the first three quarters of 2022 (Q1/22, Q2/22 and Q3/22).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were published on Nov. 18 and the MBA’s on Nov. 22.

Freddie’s were released on Oct. 15. It now updates its forecasts only quarterly. So we may not get another from it until January.

Forecaster	Q4/21	Q1/22	Q2/22	Q3/22
Fannie Mae	3.1%	3.2%	3.3%	3.3%
Freddie Mac	3.2%	3.4%	3.5%	3.6%
MBA	3.1%	3.3%	3.5%	3.7%

However, given so many unknowables, the whole current crop of forecasts may be even more speculative than usual.

And none of these forecasters had any idea that Omicron might entirely change the models on which they’re based.

Find your lowest rate today

Some lenders have been spooked by the pandemic. And they’re restricting their offerings to just the most vanilla-flavored mortgages and refinances.

But others remain brave. And you can still probably find the cash-out refinance, investment mortgage or jumbo loan you want. You just have to shop around more widely.

But, of course, you should be comparison shopping widely, no matter what sort of mortgage you want. As federal regulator the Consumer Financial Protection Bureau says:

Shopping around for your mortgage has the potential to lead to real savings. It may not sound like much, but saving even a quarter of a point in interest on your mortgage saves you thousands of dollars over the life of your loan.

Verify your new rate (Dec 7th, 2021)

Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.